Set forth below is the text of a comment that I recently posted to the discussion thread for another blog entry at this site:
“You Goons are getting hurt by the economic crisis as much as everyone else…”
What economic crisis? The stock market has richly rewarded anyone who has stayed the course and stayed invested in the market since the downturn of 2009. Of course, that excludes the narcissistic, passive-aggressive, mentally ill internet troll and Habitual Liar Rob Hocus No Step 2 Bennett. Your family’s finances are in crisis due to your poor decisions and lack of understanding of investing. However you personal economic crisis doesn’t affect the greater population.
We don’t measure success the same way, John. Your way of thinking is, if on x date you had a in your portfolio, and, if on a date y you had b in your portfolio, and if b is greater than a, then your investing choices were successful. My way of thinking is that temporary gains don’t count — they give you a short-term emotional fix but do nothing to help you pay your bills in the long term (which is what matters); in fact, temporary gains make it harder to pay your bills because they mislead you as to your true financial status and thus make effective financial planning impossible. We agree that b is greater than a for those who bought stocks at various points. We disagree as to the meaning of that reality.
What is remarkable is that the question is one that can be settled through statistical analysis. That is of course what Wade Pfau and I did in the peer-reviewed research that we co-authored. We showed that, for the entire history of the market, the valuation level that applied on the day the stock purchase was made had a DRAMATIC effect on how lasting any gains achieved from that purchase turned out to be, that it has ALWAYS been better to consider the price that applied on the day the purchase was being considered when deciding whether stocks were worth buying or not. We found that the price paid is BY FAR the biggest factor in determining long-term success, that valuations are 80 percent of the stock investing story.
You responded by threatening to get Wade fired from his job by sending defamatory e-mails to his employer unless he agreed to stop doing honest work in this field. Science!
You are too emotional re these matters to think about them clearly. You are not capable of applying reason to the subject.
I mean no person offence. But that’s the story here. You need the answer to be that Buy-and-Hold works. There is 147 years of stock market history showing that Buy-and-Hold ALWAYS hurts the investor using it in very serious ways. But you cannot bear for that to be the reality. So you lash out in wildly inappropriate and even in criminal ways at those who report the realities within your hearing distance.
Millions of middle-class investors need to hear these realities REGARDLESS of the pain that it causes you for them to hear them. So it is my intent to continue to report them. I am 100 percent sure that my ability to report them far and wide will be enhanced dramatically following the next price crash when you and those who have posted in “defense” of you will be placed in prison cells, where you belong, and that as a people we will at that time move on to better things.
All that said, I do wish you all good things. I was once a Buy-and-Holder myself. We all were born with a raging Get Rich Quick impulse residing within us. There are laws that govern the extent to which we are permitted to let that Get Rich Quick urge run wild and the extent to which we are required to rein it in a bit in our dealings with others. So I don’t say that the millions who have been hurt in very serious ways by your behavior of the past 15 years are not right to demand a long prison sentence for you. But I do sympathize with you for the pain you feel when a part of you gets excited about the phony gains you see reported on your portfolio statement and reaches out to suppress the part of you that in other circumstances would be capable of rational thought. You are not alone in facing the struggle that has ruined you.
That struggle is part of the human condition. That struggle is the story of stock investing. It is 80 percent of the effective investing adviser’s job to help his or her clients overcome his or her Get Rich Quick urge. In future days it will be widely understood that it is the JOB of the investment adviser to help people OVERCOME their natural inclination to be drawn to Buy-and-Hold strategies, not to endorse the pure Get Rich Quick approach as a means of turning a quick and easy buck.
That’s my sincere take re these terribly important matters in any event, old friend.